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Starting or Buying an Insurance Agency

COJOECOJOE subscriber Posts: 7
edited January 2007 in Selecting a Business
I am seriously considering leaving the Corporate World (have been trying for years....) to buy or start an Insurance Agency.  Yes, not the most exciting business in the world, but my overall sales acumen probably fits the mold fairly well.  Plus, I would really like to get into Financial Planning for those who really need that type of help.  There are TONS of people who need help with that type of service in their everyday life and this would offer me the ability to be more independent, be at home with the family, and  build equity in my own business.
Does anyone have any feedback, thoughts, or resources I should consider ??


  • YSDJYSDJ subscriber Posts: 1
    In Response To COJOe--starting an Insurance Agency
    My husband has been an Independent Agent for almost 30 years.  We have an agency wherein I do the customer service (I`m also licensed).  Our field of expertise is Life, Health and Annuities (non-variable)...most of our clients are small businesses.  My husband also went into partnership with a P & C agent and that has worked out pretty well.  It is tough getting your own agency going as an Independent Agent.  Commissions are the only form of income, and that can be very tricky until you have residules coming in. And even then, residules aren`t what they used to be, and you could not expect to survive on them even in their second year.  You must continously write new business (Life) to get the good commissions.  Small group health, on the other hand, pays the commissions monthly (7 years ago all carriers in Florida reduced the amount of commission paid to agents and it almost broke us!).  We have been establishing this particular agency for 18 years, and we have built a pretty substantial book of business through health care, but it is still a tough job each day.  No one pays for your health insurance, or any of your supplies.  Some people are cut out for Independent Agencies and some are not.  There are carriers --American General is one possibility that used to help their agents--that will help set you up with training, etc. and in some case they provide supplies (not health coverage)...You probably know this already.  As for Financial Planning, you must have your Series 6 (and preferrably Series7) to sell any type of variable product, otherwise you`re wasting your time as FP.  An agent can make a good living, if you can withstand the hardships while building a book of business.  Hope this helps...any questions, I would be happy to try and answer.YSDJ2007-1-29 17:40:9
  • daleyfla99daleyfla99 subscriber Posts: 1
    Hi there, I am just going into my 5th year as an agent, after leaving a 25 year career as a financial advisor.  I have my own agency here in FL and let me tell you this, the financial rewards are good but the uneveness will kill you and your credit rating.  I added an accounting & tax practice, (my own) 2 years ago and that is growing by leaps and bounds. 
    The insurance business is stagnant.  Consider this, the majority of the market is "aging out" of life insurance.  There are some sophisticated applications to protect and pass on wealth where it works better than anything, but those cases do not come along that often. Providing guaranteed income with annuities is the way to go both for your client and for you.  You would need a securities license to do variable annuities, they do not work as well as one would hope as retirement vehicles.
     Have a larger than normal nest egg to get you through start up.  You will need to spend 35-40% marketing yourself and your agency and it takes time to build a reputation.  It can be rewarding but the average insurance agent makes $55K per year.  Try to get on with a bank to be an inhouse rep.  They train you and bring you the fish in a barrel.  I mean customers, yeah...
    Don`t mean to discourage you just want you to have a good grip on reality before you make the leap.  It can be a long way down before the first branch appears growing out of the cliff.  And creditors do not have a sense of humor.
  • CSPURGEONCSPURGEON subscriber Posts: 10
    -Coming from a wash out-
    I am the one who they always talk about in the meetings at the large insurance companies who was hell bent on doing great things but let the free time eat me alive. I worked for Western-Southern Financial in Fort Wayne,IN. They are a good company and have excellent ratings. But the downside is, have YOU ever heard of them. Most had not so that hurt our sales. But the biggest piece of advice that I would give you is to manage your time!!! I did not, so as you could tell am not in the financial planning of it.
    Another thing that I found hard is the trust factor. Many of these people are putting there after lives so to say in your hands. Some have had bad experiences with other agents <either left the company/went out of business/or just plain took their money>. Not saying that you will do any of these because you sound as though you have a level head and are great as sales.
    I hope you do well. I do have a friend who does a great job and makes triple what I do. But that industry is not for me.
  • stonesledgestonesledge subscriber Posts: 608 Silver Level Member
    One of my clients has been running a successful insurance business for 10 years. His website is www.theinsurancesmith.com</A> . He has recently sold off his insurance side of business and is now offering financial services. He say that insurance has been tough and harder in the past years. I am sure if you gave him a call he would discuss with you some ideas. His name is Jeff and his # is on his web site.
  • CSPURGEONCSPURGEON subscriber Posts: 10
    stonesledge: Did you design his website? If so....Great Job! I would like some info on the type of costs I would incure if you were to build a similar website for a business that I am thinking of. I checked out Klanco.com and impressed. Being in the planning stages of the business I am interested in the cost spectrum of a website.
  • Solutions4MeSolutions4Me subscriber Posts: 0
    I had found myself in a similar situation as you have described. I decided to venture into the financial services biz, but didn;t do alot of research ahead and ended up with some lame companies that promised me the moon, but all I got was used. After major research and asking others for advice thst were now innovative and not "stagnant" as many "old school" agents and agencys are now...I found one of the best companies to associate with. Now I am non-captive, totally independent, own my own agency and overriding agents across the country. Please look at my site and contact me for more info. Thank you and best wishes to you.
  • infinique1infinique1 subscriber Posts: 0 Member
    It is obviously a large investment to start an insurance company. I would say that you should try selling insurance and make sure you're cut for it before starting your own agency. Then again, why would you want to work on a no-based salary work when you're better off getting paid in the corporate world. Entrepreneurs are made and not born.
  • Johan21Johan21 subscriber Posts: 0
    Starting an insurance company or an agency would require huge money but before you do that you should have considerable experience in the financial services business and also experience with selling insurance products.
    Surely you would have a big and bright idea but there is competition that you'll have to face and without good planning and a business plan market know how you could be in for a rough ride. You would also do well to rope in some people with 3 or more years of experience and contacts in this business.

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  • KimberlyJonesKimberlyJones subscriber Posts: 0
    The insurance business it not the one it used to be, of course there remains potential but you have to weigh your options too. While there is a need for the different types of insurance from life to health and others there is increased competition and the commissions are no longer as handsome as they used to be.
    Kimberly from Dallas Texas
  • vinny10vinny10 subscriber Posts: 0
    It's really a good idea but lot of risks are involved in this business after all it comes to relate to finance industry which update daily for its values.
  • ethanonwebethanonweb subscriber Posts: 0
    Loyalty Insurance is an independent insurance agency. We represent several A-Rated insurance companies. This allows us to provide multi-lined insurance products to businesses, families and individuals in the state of Michigan.
  • daniel_carsodaniel_carso subscriber Posts: 0
    Sounds like a change, a change is the essence, always good, never enough. Yup, financial planning (insurance services included) is a service needed by many. People just don't have the time for all, not everyone sees it the same way, which is good.
    I can recommend that if you are going to re-sell third party services you do the following. I have seen this plenty of times so..
    Avoid their image, sell their services, but at all cost create a brand for your own company and market it non-stop. Why? association, people will associate good customer service with your image (your company's image that is). Yours is a service, so if you already know your stuff this is pretty much all I can recommend
    Best of lucks,
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